Correlation Between Carlyle and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both Carlyle and Atlanticus Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Carlyle and Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Carlyle Group and Atlanticus Holdings, you can compare the effects of market volatilities on Carlyle and Atlanticus Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Carlyle with a short position of Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Atlanticus Holdings.
Diversification Opportunities for Carlyle and Atlanticus Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carlyle and Atlanticus is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Carlyle Group and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings and Carlyle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Carlyle Group are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Carlyle i.e., Carlyle and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between Carlyle and Atlanticus Holdings
Assuming the 90 days horizon Carlyle is expected to generate 1.13 times less return on investment than Atlanticus Holdings. In addition to that, Carlyle is 1.11 times more volatile than Atlanticus Holdings. It trades about 0.04 of its total potential returns per unit of risk. Atlanticus Holdings is currently generating about 0.05 per unit of volatility. If you would invest 2,042 in Atlanticus Holdings on September 12, 2024 and sell it today you would earn a total of 373.00 from holding Atlanticus Holdings or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Carlyle Group vs. Atlanticus Holdings
Performance |
| Timeline |
| Carlyle Group |
| Atlanticus Holdings |
Carlyle and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Atlanticus Holdings
The main advantage of trading using opposite Carlyle and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Atlanticus Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.The idea behind The Carlyle Group and Atlanticus Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atlanticus Holdings vs. B Riley Financial | Atlanticus Holdings vs. Atlanticus Holdings Corp | Atlanticus Holdings vs. Atlas Corp | Atlanticus Holdings vs. Harrow Health 8625 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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